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EXHIBIT 4.3
XXXXXX X. XXXXX
TOREADOR ROYALTY CORPORATION
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Agreement"), made and
entered into as of May 15, 1997, by and between Toreador Royalty Corporation, a
Delaware corporation (the "Company"), and Xxxxxx X. Xxxxx ("Optionee");
W I T N E S S E T H:
WHEREAS, Optionee provides consulting services ("Services") to the
Company; and
WHEREAS, the Company desires to extend to Optionee the opportunity to
acquire Common Stock as an added incentive for Optionee to continue providing
Services to the Company and to advance the interests of the Company; and
WHEREAS, the Board of Directors of the Company has authorized and
approved the grant of non-qualified stock options to Optionee subject to the
terms and conditions herein provided; and
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound, do hereby agree as follows:
1. Grant of Option and Option Period. The Company hereby grants
to Optionee as of the date of this Agreement (the "Grant Date"), subject to the
provisions of Section 2 hereof and as hereinafter set forth, an option (the
"Option") to purchase 10,000 shares of Common Stock, par value $.15625 per
share, of the Company ("Common Stock") at the price of $2.50 per share, at any
time or (with respect to partial exercises) from time to time during a period
commencing on the first anniversary of the Grant Date and ending on May 15,
2007, (the "Option Period"), provided that the number of shares purchasable
hereunder in any period or periods of time during which the Option is exercised
shall be limited as follows:
(a) only 33 1/3% of such shares (if a fractional number,
then the next lower whole number) are purchasable, in whole at any
time or in part from time to time, commencing May 15, 1998, if
Optionee provides Services to the Company until that date;
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(b) an additional 33 1/3% of such shares (if a fractional
number, then the next lower whole number) are purchasable, in whole at
any time or in part from time to time, commencing May 15, 1999, if
Optionee provides Services to the Company until that date;
(c) the remainder of such shares are purchasable, in
whole at any time or in part from time to time, commencing May 15,
2000, if Optionee provides Services to the Company until that date.
2. Termination of Service. Any provision of Section 1 hereof to
the contrary notwithstanding:
(a) If Optionee ceases to provide Services to the Company
on account of Optionee's fraud, dishonesty or intentional
misrepresentation, then the Option shall automatically terminate and
be of no further force or effect as of the date Optionee ceases to
provide Services to the Company;
(b) If Optionee shall die during the Option Period while
providing Services to the Company, the Option may be exercised, to the
extent that Optionee was entitled to exercise it at the date of
Optionee's death, within one year after such death (if otherwise
within the Option Period), but not thereafter, by the executor or
administrator of the estate of Optionee or by the person or persons
who shall have acquired the Option directly from Optionee by bequest
or inheritance; and
(c) If Optionee ceases to provide Services to the Company
for any reason (other than the circumstances specified in paragraphs
(a) and (b) of this Section 2) within the Option Period, the Option
may be exercised, to the extent Optionee was able to do so at the date
of termination of Services, within three (3) months after such
termination (if otherwise within the Option Period), but not
thereafter.
3. Exercise During Service. Except as provided in Section 2
hereof, the Option may not be exercised unless Optionee is at the time of
exercise providing Services to the Company.
4. Exercise of Option. The Option may be exercised by written
notice signed by Optionee and delivered to the Secretary of the Company or sent
by United States registered or certified mail, postage prepaid, addressed to
the Company (to the attention of its Secretary) at its corporate office in
Dallas, Texas. Such notice shall state the number of
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shares as to which the Option is exercised and shall be accompanied by the full
amount of the purchase price of such shares, in cash or by check. Any such
notice shall be deemed given on the date on which the same was deposited in a
regularly maintained receptacle for the deposit of United States mail,
addressed and sent as above-stated, or, in the case of hand delivery, on the
date of receipt thereof by the Secretary of the Company. In the event of
Optionee's death, the executor or administrator of Optionee's estate (or anyone
who shall have acquired the Option by will or pursuant to the laws of descent
and distribution) may exercise the Option in accordance with the provisions of
this Agreement.
5. Delivery of Certificates Upon Exercise of the Option.
Delivery of a certificate or certificates representing the purchased shares of
Common Stock shall be made promptly after receipt of notice of exercise and
payment of the purchase price. If the Company so elects, it obligation to
deliver shares of Common Stock upon the exercise of the Option shall be
conditioned upon its receipt from the person exercising the Option of an
executed investment letter, in form and content satisfactory to the Company and
its legal counsel, evidencing the investment intent of such person and such
other matters as the Company may reasonably require. It the Company so elects,
the certificate or certificates representing the shares of Common Stock issued
upon exercise of the Option shall bear a legend in substantially the following
form:
THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNLESS SUCH SHARES ARE FIRST REGISTERED
THEREUNDER OR UNLESS THE COMPANY RECEIVES A WRITTEN OPINION OF
COUNSEL, WHICH OPINION AND COUNSEL ARE ACCEPTABLE TO THE COMPANY, TO
THE EFFECT THAT REGISTRATION THEREUNDER IS NOT REQUIRED.
6. Adjustments Upon Changes in Common Stock. In the event that
before delivery by the Company of all the shares in respect of which the Option
is granted, the Company shall have effected a Common Stock split or dividend
payable in Common Stock, or the outstanding Common Stock of the Company shall
have been combined into a smaller number of shares, the shares still subject to
the Option shall be increased or decreased to reflect proportionately the
increase or decrease in the number of shares outstanding, and the purchase
price per share shall be decreased or increased so that the aggregate purchase
price
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for all the then optioned shares shall remain the same as immediately prior to
such split, dividend or combination. In the event of a reclassification of
Common Stock not covered by the foregoing, or in the event of a liquidation,
separation or reorganization, including a merger, consolidation or sale of
assets, the Board shall make such adjustments, if any, as it may deem
appropriate in the number, purchase price and kind of shares still subject to
the Option. The provisions of this Section 6 shall only be applicable if, and
only to the extent that, the application thereof does not conflict with any
valid governmental statute, regulation or rule.
7. Transferability. The Option evidenced hereby is not
transferable otherwise than by will or by the laws of descent and distribution
or pursuant to a qualified domestic relations order as defined in the Code or
in Title I of the Employee Retirement Income Security Act of 1974, as amended,
and during the lifetime of Optionee is exercisable only by Optionee.
8. Applicable Law. All questions arising with respect to the
provisions of this Agreement shall be determined by application of the laws of
the State of Texas except to the extent preempted by Federal law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
The "Company"
TOREADOR ROYALTY CORPORATION
By: /S/ XXXX XXXX XXXXXXXXXX
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Xxxx Xxxx XxXxxxxxxx
Chairman of the Board and President
"Optionee"
/S/ XXXXXX X. XXXXX
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Xxxxxx X. Xxxxx
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